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Almost every Long Term Disability Insurance Policy I have ever reviewed contains a limited period (usually 24 months) of time that it will pay benefits if a claimant is unable to perform the duties of his/her "Own" (see prior post on how "Own" occupation is misleading) occupation. The plans most commonly contain a change in the definition of disability from "Own"occupation to "Any" occupation after the 24 month period runs. So, after 24 months the claimant must be able to establish that they are unable to perform the duties of "Any" occupation in order to continue to receive benefits. A few caveats-there is also usually a qualifier for "Any" occupation that the claimant may be qualified to perform the identified occupation by education, training or experience. There is also usually an earnings qualified that the identified "Any" occupation must usually pay some percentage (commonly 60 or 80%) of the claimants "Own" occupation.

In this recent case out of Louisiana the court rejected Cigna's (Life Insurance Company of North America) efforts to deny a claim by a man who was permanently paralyzed and wheelchair bound. The claimant, Mr. Hughes, had been employed as an electrician when he was forced to stop working as a result of his paralysis. While Cigna initally approved his claim for LTD benefits in 1999, what followed was very troubling.

Anyone familiar with LTD Insurance claims and ERISA knows that you must first exhaust your administrative remedies before filing suit. In other words, you have to try and convince the LTD insurer to reverse its decision to deny the claim for benefits. While this may seem like an difficult task since the LTD insurer who makes the claims decision is the same entity that pays the claim, it is not impossible.

In Rochow v. Life Ins. Co. of N. Am., 2015 U.S. App. LEXIS 3532 (6th Cir. 2015), the Sixth Circuit Court of Appeals (the Court) en banc overturned a previous decision of a 3 judge panel that had allowed plaintiff's claim for the disgorgement of profits earned by the disability insurer.

The 6th Circuit recently granted a request for en banc review of the Rochow v Life Insurance of North America case where a three judge panel determined that the claimant could recover for unjust enrichment the profits the insurance company had earned on the wrongfully denied LTD benefits.

SMDA filed a lawsuit against Liberty Life Assurance Company of Boston (LLAC) after it denied a claim for LTD benefits filed by an employee of DTE energy who had significant orthopedic back problems. The claim was governed by ERISA since it was a group plan provided through the employer. Despite the fact that the client submitted significant documentation of her back problems including multiple objective tests (x-ray and MRI's) demonstrating the source of her back pain LLAC denied her claim based on several paper reviews performed by doctors hired through an expert witness service frequently used by the insurance company.

The administrative record is simply all of the documents provided to the LTD insurance company during the claims process, the claims file, the documents provided during the administrative appeal and the contract documents.

SMDA had the opportunity to represent a registered nurse who stopped working in the Emergency Department after two level cervical disc fusion surgery. Several months after the surgery the LTD insurer terminated her benefits when it determined "that the medical on file does not appear to support any significant functional impairment other than that contributed by your cervical fusion." The insurer ignored the fact that after the surgery she developed significant fatigue and was referred to a rheumatologist. She has been diagnosed with Lupus, Sjorgen's Syndrome, Mitral Valve Prolapse, Migraine Headaches and Raynaud's Syndrome. As a result of her illness she experienced marked fatigue, joint pain and shortness of breath. She also had significant sit/stand restriction.

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